Govt approves 68% increase in Hajj expenses

ECC allows outsourcing financing of half of quota to save $444m

ISLAMABAD:

 

The government on Monday approved increasing the Hajj expenses to Rs1.175 million per pilgrimage – a surge of 68% over the past year – and also allowed outsourcing the financing of half of the quota to save $444 million amid a severe economic crunch.

The decisions were taken by the Economic Coordination Committee (EEC) of the cabinet, which also sanctioned a Rs12 billion budget for the conduct of the 7th population census amid the Pakistan Peoples Party’s (PPP) objections over the digital headcount.

Following a warning by party chairman Bilal Bhutto Zardari about quitting the government, Commerce Minister Syed Naveed Qamar also raised objections during the ECC meeting.

However, the chairman of the EC, Ishaq Dar, advised the minister to take up the matter with Prime Minister Shehbaz Sharif.

A finance ministry handout stated that the Ministry of Religious Affairs submitted a summary on Hajj Policy 2023.

The total foreign currency requirements for 2023 Hajj were $534 million – a sum that is equal to 14% of the country’s official foreign exchange reserves as of last week.

The ECC after discussion approved Hajj-2023 policy and agreed to provide foreign exchange cover of $90 million, it added.

UPDATE (Front Page)

 

Read: PIA announces fares for Hajj 2023

In order to reduce the outflow of foreign currency, the ECC approved outsourcing the Pakistani Hajj quota to its citizens living abroad or giving an option to local Pakistanis to arrange money from abroad. Pakistan is in talks for the IMF deal for the past over one month but so far no official announcement for the staff-level agreement has been made.

As per policy Hajj quota allocated to Pakistan for the year 2023 is 179,210. The ECC approved to equally distribute the quota between the government and private Hajj schemes. Out of the government and private Hajj schemes, a quota of 50% each shall be reserved for sponsorship schemes, according to the decision. This means about 89,605 non-resident persons would either perform Hajj on Pakistani quota or will send money to locals to finance their Hajj.

Under the sponsorship scheme, the applicants will be required to deposit their Hajj dues in foreign exchange remitted from abroad and will not be allowed to deposit the Hajj dues from foreign currency accounts in Pakistan, according to the ECC decision.

The sponsorship scheme of the government Hajj quota will generate about $194 million and the private Hajj scheme is expected to fetch more than $250 million, depending on the cost of various packages and applications received for it –bringing total outsourced funds to $444 million.

The decision will ease the pressure on the foreign exchange reserves that remain thin. The sponsorship scheme of the government Hajj quota will be offered on a first come first served basis.

The ECC approved the cost of the Hajj at Rs1.175 million for the north region and for the south region it has fixed the cost at Rs1.165 million, according to the finance ministry. The expenses are 68% or Rs475,000 higher than the previous fiscal year – primarily reflecting the adverse impact of the currency devaluation.

The intending pilgrims who have performed Hajj within the last five Hajj years, from 2016 to 2022, will be ineligible for this Hajj. However, intending pilgrims of the sponsorship scheme are exempted from this bar.

Read more: Hajj quota cut to save forex

As much as 3% of the total seats under the government scheme will be reserved for hardship cases and 300 seats will be reserved for labour and low-paid employees of companies registered with the EOBI and Workers Welfare Fund. Their selection will be made through separate balloting.

The ECC also approved Rs12 billion supplementary grant for the planning commission for the conduct of the 7th Population & Housing Census. The cost of the census has been estimated at Rs34 billion and the government has already provided Rs10 billion to the Pakistan Bureau of Statistics. The ministry sought more funds for making payments to the Pakistan Army, NADRA, SUPARCO and other vendors.

The census exercise is already underway. Foreign Minister Bilawal Bhutto Zardari and Sindh's chief minister have raised objections to the conduct of the digital census where the people have been given the choice to enumerate themselves.

The ECC also approved Rs3.2 billion supplementary grant in favour of Poverty Alleviation & Social Safety for National Poverty Graduation Programme (NPGP).

The ECC deferred a summary presented by the Ministry of National Food Security & Research on Urea Fertilizer requirement for year 2023 with direction to incorporate the recommendations of Committee framed by ECC on gas distribution plan headed by Shahid Khaqan Abbasi.

The ECC also deferred another summary submitted by the Ministry of Industries and Production on Solar Panel & Allied Equipment Manufacturing Policy-2023 with the direction to review and revise the proposed policy considering inputs from all stakeholders.